Reasonable Belief About Income Tax Liability (OFFSITE LINK)-SEDM
United States v. Murdock, 290 U.S. 389 (1933)
“Aid in arriving at the meaning of the word "willfully" may be afforded by the context in which it is used (United States v. Sioux City Stock Yards Co., 162 Fed. 556, 562), and, we think, in the present instance the other omissions which the statute denounces in the same sentence only if willful, aid in ascertaining the meaning as respects the offense here charged. The Revenue Acts command the citizen, where required by law or regulations, to pay the 396*396 tax, to make a return, to keep records, and to supply information for computation, assessment or collection of the tax. He whose conduct is defined as criminal is one who "willfully" fails to pay the tax, to make a return, to keep the required records, or to supply the needed information. Congress did not intend that a person, by reason of a bona fide misunderstanding as to his liability for the tax, as to his duty to make a return, or as to the adequacy of the records he maintained, should become a criminal by his mere failure to measure up to the prescribed standard of conduct. And the requirement that the omission in these instances, must be willful, to be criminal, is persuasive that the same element is essential to the offense of failing to supply information.“
United States v. Mason, 412 U.S. 391 (1973)
It is, of course, true that Supreme Court decisions are, on occasion, overruled, and that the opportunity to overrule them would never arise if litigants did not continue to challenge their validity. But, in this context at least, it is unnecessary to penalize the United States' proper reliance on our past decisions in order to reexamine them, since there is no bar to a suit by plaintiffs below directly against Oklahoma for recovery of the tax. Cf. Poafpybitty v. Skelly Oil Co., 390 U.S. 365 (1968). And if the doctrine of stare decisis has any meaning at all, it requires that people in their everyday affairs be [412 U.S. 400] able to rely on our decisions, and not be needlessly penalized for such reliance. Cf. Flood v. Kuhn, 407 U.S. 258, 283 (1972); Wallace v. M'Connell, 13 Pet. 136, 150 (1839).
[United States v. Mason, 412 U.S. 391 (1973)]
U.S. v. Bishop, 412 U.S. 346 (1973)
The requirement of an offense committed "willfully" is not met, therefore, if a taxpayer has relied in good faith on a prior decision of this Court. James v. United States, 366 U.S. at 221-222. Cf. Lambert v. California, 355 U.S. 225 (1957). The Court's consistent interpretation of the word "willfully" to require an element of mens rea implements the pervasive intent of Congress to construct penalties that separate the purposeful tax violator from the well meaning, but easily confused, mass of taxpayers.
Until Congress speaks otherwise, we therefore shall continue to require, in both tax felonies and tax misdemeanors that must be done "willfully," the bad purpose or evil motive described in Murdock, supra. We hold, consequently, that the word "willfully" has the same meaning in § 7207 that it has in § 7206(1). Since the only issue in dispute in this case centered on willfulness, it follows that a conviction of the misdemeanor would clearly support a conviction for the felony.{9} Under these circumstances, a lesser included offense instruction was not required or proper, for, in the federal system, it is not the function of the jury to set the penalty. Berra v. United States, 351 U.S. at 134-135. [412 U.S. 362]
[U.S. v. Bishop, 412 U.S. 346 (1973)]
Spies v. U.S., 317 U.S. 492 (1943)
The difference between willful failure to pay a tax when due, which is made a misdemeanor, and willful attempt to defeat and evade one, which is made a felony, is not easy to detect or define. Both must be willful, and willful, as we have said, is a word of many meanings, its construction often being influenced by its context. United States v. Murdock, 290 U.S. 389. It may well mean something more as applied to nonpayment of a tax than when applied to failure to make a return. Mere voluntary and purposeful, as distinguished from accidental, omission to make a timely return might meet the test of willfulness. But in view of our traditional aversion to imprisonment for debt, we would not, without the clearest manifestation of Congressional intent, assume that mere knowing and intentional default in payment of a tax, where there had been no willful failure to disclose the liability, is intended to constitute a criminal offense of any degree. We would expect willfulness in such a case to include some element of evil motive and want of justification in view of all the financial circumstances of the taxpayer.
Had § 145(a) not included willful failure to pay a tax, it would have defined as misdemeanors generally [412 U.S. 353] a failure to observe statutory duties to make timely returns, keep records, or supply information -- duties imposed to facilitate administration of the Act even if, because of insufficient net income, there were no duty to pay a tax. It would then be a permissible, and perhaps an appropriate, construction of § 145(b) that it made felonies of the same willful omissions when there was the added element of duty to pay a tax. The definition of such nonpayment as a misdemeanor, we think, argues strongly against such an interpretation.
[. . .]
It is not the purpose of the law to penalize frank difference of opinion or innocent errors made despite the [412 U.S. 361] exercise of reasonable care.
[Spies v. U.S., 317 U.S. 492 (1943)]